Watches of Switzerland Soars on Optimistic Outlook Despite Tariff Fears

Shares of Watches of Switzerland Group Plc (WoSG) experienced their most significant rise since April, driven by an optimistic outlook for the first half of its financial year. This positive forecast successfully alleviated investor concerns regarding the potential impact of US tariffs on the luxury watch retailer. The company's stock soared by as much as 11% in early trading, settling at a 7.2% gain by 9:46 a.m. in London, despite remaining near its 2020 lows due to broader worries about softened demand for high-end watches and the substantial 39% US levy on Swiss imports.

The luxury retailer reported "consistently strong" trading performance throughout its fiscal first half, which concludes at the end of October. Notably, the US market showed particular resilience and growth, defying earlier anxieties stemming from the announcement of increased tariffs. WoSG, which holds the distinction of being the UK's leading seller of Rolex watches, also highlighted the exceptional success of its flagship boutique located on London’s prestigious Old Bond Street, indicating robust operational strengths.

Brian Duffy, Chief Executive Officer of Watches of Switzerland, conveyed a confident sentiment during a Bloomberg TV interview, stating, "The general mood in Switzerland is that the situation will improve from what it is today." He explained that watch brands have proactively front-loaded inventory into the US market. This strategic move aims to provide a buffer against the immediate effects of the tariffs and buy time for longer-term adjustments. Duffy further assured investors that, as a result, there has been "no real impact on conditions or pricing from our brands," allowing the company to trade well and feel "very positive about our half-year" performance.

This reassuring trading statement was well-received by financial analysts. RBC analyst Piral Dadhania noted that the update "should underpin first-half 2026 expectations, particularly in the context of softer investor sentiment." The upbeat assessment from Watches of Switzerland follows a similar positive sentiment expressed by Swatch Group AG CEO Nick Hayek just last week, who also eased investor nerves regarding tariffs on its US business, providing a much-needed boost across the entire watch industry.

However, despite the current positive momentum, Duffy did acknowledge an element of uncertainty for the second half of the financial year. He indicated that watch brands are likely to implement international price increases. These potential adjustments would not solely be a reaction to the US tariffs but would also be influenced by other macroeconomic factors, including a weaker dollar and persistently higher gold prices, suggesting a broader recalibration of pricing strategies across the luxury watch sector.